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over the last four years. The experts explained the trends saying sellers in the mid-price bracket are more desperate to sell and so have been reducing prices, whereas those in the upper bracket are less desperate and so willing to wait for a buyer to appear and do not cut the price to get a faster sale.
Moscow is in the world top ten most expensive premium offices space , according to a study by Knight Frank out of a total of 75 largest cities in the world. By the end of 2017, the average cost of renting expensive offices was $782 per square meter per year. At the same time, the average rental rate on the Moscow office market is 1.8 times lower than the premium rate of $427 per sqm. According to experts, the most expensive business centres in the Russian capital are represented by ten properties including: Romanov Dvor, White Square, White Gardens, 4 Winds. Over the past three years, the main tenants of premium offices in Moscow are companies from the "technology", "media", "telecommunications", as well as from the manufacturing sector. Their cumulative share in the total volume of transactions is 54% (27% each). The companies from the banking and financial sector take the third place with a 14% share. The first place in the ranking of cities with the most expensive jobs traditionally holds Hong Kong. Here, the cost of renting a "square" of a premium workplace will cost $2,500 per year. The five most expensive business locations in the world include Manhattan in New York ($1520 per sq. M.), London City ($1018) and West End ($1454), Tokyo ($1113) and Paris ($972 per sq. M.).
9.1.5 Retail sector news
Detsky Mir released the first quarter of 2018 IFRS results on May 2. Overall revenues rose 14% y/y to R24.0bn, while online revenues surged 65% y/y to R1.5bn (6.2% of the total, up from 4.3% in 1Q17). The retailer opened three stores in the first quarter of 2018 and kept its full-year guidance of 70 openings in 2018, planning a massive pickup in the second half of 2018 . The gross margin contracted by 110 bps y/y to a record low of 29.6%, as the company's price investments overshadowed an increased number of direct contracts with suppliers and a higher share of private label (26% in the first quarter of 2018 , compared with 24% a year before).
Magnit is vying for the top slot with current market leader X5, by hiring two directors from X5’s leading format Pyaterochka Artem Smolensky and Tatyana Knyazeva, the retailer said on May 18. Last week the market was caught by surprise after the former CEO of X5’s Pyaterochka supermarket chain, Olga Naumova, was appointed Executive Director of Magnit , according to reports in Kommersant and Vedomosti on May 16.
X5 started to close Perekrestok Express stores after it could not find a buyer for one of its three formats (the retailer operates Pyaterochka, Perekrestok, and Karusel formats). Reportedly in the past seven months the number of Pyaterochka Express stores declined 1.5-fold from 170 stores to 116. In 2017 Perekrestok Express was the only format in X5 line-up posting revenue decline of 11.6% and average receipt decline of 2.5%.
Magnit sees a possibility of doubling its market share in the next three-four years , the CEO of the company Khachatur Pombukhchan told the press on May 18. He argued that while Russia's seven largest retailers control 30% of the market, 42% are still taken by local regional chains, leaving place
73 RUSSIA Country Report June 2018 www.intellinews.com